Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) have been “friendly” competitors over the last three decades in technology, and that friendliness has grown over the years as they have been the two companies that are still among the elite of tech companies and are the ones that have managed to survive over the last 30 years.
But does Apple, considered the most valuable tech company in the world despite losing 40 percent of its stock value in the last seven months, actually be in a position to learn something from Microsoft, which was the big man on the tech campus more than a decade ago?
Greg Satell put forth some ideas and arguments as to why he prefers Microsoft Corporation (NASDAQ:MSFT) to Apple Inc. (NASDAQ:AAPL) in a question asking what is the most successful technology company. When push comes to shove, Satell said his money is going on Microsoft for its longevity and stability.
But what about Apple’s longevity?
My main disagreement with Satell is simply that Apple’s business model has been different from Microsoft’s for 30 years and it has done just fine, thank you very much. Apple is no new kid on the block – perhaps Satell should look at this from a purely objective view.
My main point is, if there is any advice for Apple Inc. (NASDAQ:AAPL) at this point, Satell missed it. He went on about a need for Apple to diversity itself away from relying so heavily on iOS, develop and build alliances with other companies (not tear them down like it’s doing with Samsung) and it should be spending so much time and energy on legal battles over patents.
So what should have Satell addressed in his piece?
For me, the one thing that has remained constant for Microsoft, but Apple has seemed to abandon in recent years has been product innovation.
In the early years, both companies had the same business model they have now – Microsoft Corporation (NASDAQ:MSFT) produced the software, but outsourced its hardware by working with partners. Apple Inc. (NASDAQ:AAPL) meanwhile, has been working with its insulated ecosystem where it produces virtually all or most of its software, hardware and components for its various devices.
Microsoft has been steadily investing serious money in research and development, and thus it would put out a new innovation (like an upgraded Windows OS, for example) every few years. Even after three decades, it still won’t put out anything unless it meets its high quality standards. Plus, it is very patient with its rollouts. It doesn’t measure success in the next couple of quarters; it measures success over a couple of years. Take Vista, for example. That OS was panned from the get-go, but Microsoft patiently sold it and gave it a full couple of years in the market before ditching it in place of Windows 7.
Apple Inc. (NASDAQ:AAPL) has been not so patient.
While Redmond gives its new innovations a fair shot to produce sales numbers, Apple has recently been on a dizzying production cycle where it tries to roll out a new device every few months, and an new OS nearly every year. In this writer’s humble opinion, focusing on quantity of products in the market or the speed in which they are produced takes away the focus on innovation. Yes, Apple was the leader in tech innovation – but that was when Apple looked to make devices that were truly new and different from their predecessors, not just updates from the fall because now it’s spring.
If Apple wants to return to its innovative ways, it likely could take from the Microsoft model in this way – show down. Once a device is introduced, don’t put out a new version until it is truly a new version. Let the level of innovation dictate the production schedule. Apple has succeeded for 30 years because it has been different from Microsoft in the ways Satell wrote – but it was successful like Microsoft due to the similarity in focus on innovation. When Apple diverged from that, it lost its edge.
What are your thoughts about Apple Inc. (NASDAQ:AAPL) as it compares to Microsoft Corporation (NASDAQ:MSFT), and where do you see it going from here? Do you think Apple should heed any of this advice and be willing to adapt? Let us know your thoughts in the comments section below.
DISCLOSURE: I own no positions in any stock mentioned.
